Unrealized Mexico demand spurs US gas north: Enlink

  • Market: Natural gas
  • 31/08/18

Natural gas flowing north from Oklahoma's prolific Scoop/Stack formation is increasingly competing with Permian gas moving to the upper midcontinent's demand hubs. The choke on Oklahoma gas flows stems, in part, from demand in Mexico not picking up as quickly as previously expected, said Enlink Midstream Partners.

"The anticipation was that Mexico's demand was going to increase significantly, but it has been slower to develop. We have seen (gas) move into Northern Natural Gas and other pipelines," said Cindy Jaggi, senior vice-president of Oklahoma at Enlink.

The thought was that Mexico's demand for gas was going to draw more gas from the oil-rich Permian region in Texas, but infrastructure delays have diverted the gas to other US destinations.

"Significant delays in construction of the connecting pipelines on the Mexican side of the border have led to relatively low utilization of cross-border pipeline capacity from western Texas," the US Energy Information Administration (EIA) said last week. "Some pipelines in Mexico have been delayed by more than a year from their original expected in-service dates, in part because of disputes contesting pipeline routes."

US natural gas exports to Mexico via pipeline reached a new record in May at 4.4 Bcf/d (125mn m³/d), according to the latest EIA data. The agency has predicted that figure will increase as June and July data are released, but the majority of those volumes currently come from the Eagle Ford shale in south Texas.

As a result, an influx of Permian gas flowing north has left Oklahoma gas even more log-jammed than it was previously thanks to a lack of processing and takeaway capacity.

Daily flow volumes into Northern Natural Gas pipeline at the demarcation point between the production and market zones in Kansas have consistently surpassed last year's volumes by three-fold over the past two months.

The Northern Natural Gas pipeline system is one of the principal ways that gas produced in Texas and Oklahoma moves north to Wisconsin and Minnesota.

Daily flow volumes through Northern Natural's demarcation point have averaged 1.06 Bcf/d from the beginning of June to 28 August this year. That compares with a rolling 30-day-average over the same period last year of 364.3mn cf/d, according to data from ABB Velocity Suite.

As Oklahoma gas gets squeezed within its traditional routes to demand centers in the north, prices face increasing pressure.

Prices at Oneok, Oklahoma, reached a near four-month low on 28 August at $1.54/mmBtu, expanding the price discount to prices at the Henry Hub to $1.40/mmBtu. The downward pressure on prices coincides with continued growth in production.

Gross gas production from the Anadarko basin, which underlies northwest Oklahoma and parts of Texas, breached 7 Bcf/d (198mn m³/d) in July, according to the latest US Energy Information Administration (EIA) data. Output should continue to climb into September, according to EIA estimates.

Midstream companies like Enlink are venturing to relieve the bottleneck in the near-term by building on existing infrastructure.

Enlink announced in June plans to move natural gas liquids (NGLs) processed at its Chisolm facility in central Oklahoma to the company's Cajun-Sibon pipeline in southeast Texas on Oneok Patners' Arbuckle pipeline.

Oneok plans to expand its midcontinent NGL gathering system by 100,000 b/d and its existing Sterling III pipeline by 60,000 b/d by the end of 2018.

Oneok's NGL gathered 150,000-200,000 b/d out of the Stack and Scoop plays as of June.

While bottleneck issues have resulted in production curbs in Bakken shale production, Jaggi does not see the same fate for Scoop/Stack producers.

"Right now, I would tell our producers to move forward with their plans," Jaggi said.


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Louisiana pipeline crossing bill nears vote: Update

Louisiana pipeline crossing bill nears vote: Update

Updates scheduled timing of vote in first paragraph. New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote next week on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Louisiana pipeline crossing bill nears senate vote


27/03/24
News
27/03/24

Louisiana pipeline crossing bill nears senate vote

New York, 27 March (Argus) — The Louisiana state senate is scheduled to vote tonight on a bill seeking to clarify pipeline servitude rights and expedite pipeline crossing disputes, advancing legislation promoted by three natural gas pipeline companies involved in a legal battle with US midstream giant Energy Transfer. Natural gas transmission projects by Williams, Momentum Midstream and DT Midstream — which aim to connect growing production out of the prolific Haynesville shale to a wave of new LNG export terminals along the US Gulf coast — have been put on hold while legal proceedings between Energy Transfer and DT Midstream play out. All three companies' proposed pipelines would cross Energy Transfer's own Tiger pipeline in northern Louisiana. The three pipeline companies' projects propose an excessive number of crossings over the Tiger line, an attorney for Energy Transfer argued in a Louisiana senate committee last week, and Energy Transfer has the servitude rights to stop them. But Energy Transfer's "unique" interpretation of the civil code on pipeline crossings is hurting the economy of Louisiana, the author of the bill , Louisiana senator Alan Seabaugh (R), said last week. By blocking the construction of new pipelines out of the Haynesville, Energy Transfer is eliminating jobs and taxes that would be created by new infrastructure, he said. Moreover, by arguing its servitude rights extend above and below its existing pipeline "to the center of the earth," Energy Transfer is "asserting a right that nobody has ever asserted before," Seabaugh said. The Seabaugh bill clarifies that, unless explicitly stated otherwise in a contract, pipeline servitude rights extend only to the physical space occupied by the pipeline and any space necessary to maintain it. The contract stipulating Energy Transfer's servitude rights for the Tiger pipeline is silent on the subject of that vertical, underground space, according to bill supporters. "This really isn't about pipeline crossings — this is about controlling market share," said Jimmy Faircloth, attorney for Momentum Midstream. But the pipeline industry has been amicably working together for decades to allow for reciprocal crossings, Energy Transfer attorney Kay Medlin said. By ripping up this convention over a dispute involving so many crossings, and forcing an expedited legal proceeding for something which "is not a minor process," the Seabaugh bill threatens an industry "that ain't broke," she said. "This legislation will break it, and you will likely spend years trying to fix it, if you ever can," Medlin said. The Seabaugh bill is a companion to two bills which passed 100-0 and 99-0, respectively, in the Louisiana House of Representatives on 21 March. Those bills seek to clarify the law on pipeline crossings and to expedite proceedings on pipeline crossing disputes. By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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27/03/24

Grupo Carso expande su huella en energía

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Serica CEO warns on UK offshore investment


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27/03/24

Serica CEO warns on UK offshore investment

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Oil transition plans inadequate for investors: Report


27/03/24
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27/03/24

Oil transition plans inadequate for investors: Report

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